Kastner v. Intrust Bank et al

Filing 214

MEMORANDUM AND ORDER denying as moot 184 Motion to Strike; granting 192 Motion for Summary Judgment; denying as moot 208 Motion for Extension of Time to File Response/Reply; denying 209 Motion for Oral Argument; denying as moot 211 Motion to Disqualify. Signed by District Judge Eric F. Melgren on 9/25/2013. (alm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS

KRISTOFER THOMAS KASTNER,
Plaintiff,

vs.

Case No. 10-1012-EFM-KMH

INTRUST BANK, et al.,
Defendants.

MEMORANDUM AND ORDER
In 1996, Plaintiff Kristofer Thomas Kastner’s grandmother executed a trust with
Defendant Intrust Bank serving as the trustee. Plaintiff, a beneficiary, brings suit against Intrust
Bank, four of its bank officers, and Intrust Financial Corporation alleging that the trust has lost
value since his grandmother’s death in 2000.
Summary Judgment (Doc. 192).

Before the Court is Defendants’ Motion for

For the following reasons, the Court grants Defendants’

motion.

I.

Factual and Procedural Background1

Local Rules for Summary Judgment

1

In accordance with summary judgment procedures, the Court has set forth the uncontroverted facts, and
they are related in the light most favorable to the non-moving party.

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The required rules for summary judgment motions in the District of Kansas are set forth
in D. Kan. Rule 56.1. Under that rule, “[a]ll material facts set forth in the statement of the
movant will be deemed admitted for the purpose of summary judgment unless specifically
controverted by the statement of the opposing party.”2 D. Kan. Rule 56.1(b) addresses a party’s
responsibility in opposing a motion for summary judgment.
(1) A memorandum in opposition to a motion for summary judgment must begin
with a section containing a concise statement of material facts as to which the
party contends a genuine issue exists. Each fact in dispute must be numbered by
paragraph, refer with particularity to those portions of the record upon which the
opposing party relies, and, if applicable, state the number of movant's fact that is
disputed.
(2) If the party opposing summary judgment relies on any facts not contained in
movant's memorandum, that party must set forth each additional fact in a
separately numbered paragraph, supported by references to the record, in the
manner required by subsection (a), above. All material facts set forth in this
statement of the non-moving party will be deemed admitted for the purpose of
summary judgment unless specifically controverted by the reply of the moving
party.
Plaintiff is pro se, and the Court must afford him some leniency in his filings.3 A pro se
litigant, however, is still expected to “follow the same rules of procedure that govern other
litigants.”4 In this case, Plaintiff failed to appropriately controvert any of Defendants’ facts
because he did not coherently respond to Defendants’ factual statement.5 He also failed to

2

D. Kan. Rule 56.1(a).

3

Kay v. Bemis, 500 F.3d 1214, 1218 (10th Cir. 2007).

4

Id.

5

Plaintiff submitted approximately 1200 pages in 224 separate documents/exhibits as his response to
Defendants’ motion for summary judgment. The Court opened numerous documents in an attempt to determine
Plaintiff’s response. The first six documents submitted by Plaintiff illustrate the Court’s inability to discern
Plaintiff’s argument or response. The first page (Doc. 200) appears coherent enough, but the second page (Doc. 2001) cuts off mid-sentence. On the third page (Doc. 200-2), Plaintiff starts mid-sentence (although apparently from an
entirely different sentence than the previous page), and he starts numbered assertions, starting with the number 19.

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appropriately set forth additional facts coherently.

Nonetheless, the Court recognizes that

Plaintiff is pro se, and to the extent it could understand Plaintiff’s argument, the Court construes
it generously.
Facts
Jessie I. Brooks executed a Trust Agreement, denominated the “Jessie I. Brooks
Revocable Trust,” on June 5, 1996 (“the Trust”). The Trust named Intrust Bank, NA as the
Trustee for the Trust. The Trust provided for distributions during the lifetime of the settlor and,
upon her death, they continued for the benefit of the settlor’s daughter, Nola Mae Wills. The
remainder of the Trust assets, if any, is to be distributed to the settlor’s grandson, Plaintiff
Kristofer Thomas Kastner, upon the death of Ms. Wills. Upon the death of the settlor, the Trust
provided for several distributions, including a one-time distribution of twenty-five thousand
dollars to Plaintiff.
Jessie I. Brooks died in 2000. Ms. Wills is still living.6 On January 1, 2001, the Trust
had a total balance of $859,264.52. On December 31, 2008, the Trust had a total balance of
$847,518.09. On December 31, 2011, the Trust had a balance of $1,006,425.44. The Trust
disbursed $516,364.51 between January 1, 2001 and December 31, 2011. From 2001 to 2011,
the Trust earned more percentage-wise than the S&P 500 index did.

This page runs through the numbered assertion of 27, but again cuts off mid-sentence. The fourth page (Doc. 2003) is half of one sentence with Plaintiff’s signature and address. The last two pages (Docs. 200-4, 200-5) are a list of
31 footnotes with citations. The Court notes, however, that these footnotes do not appear to match the footnotes
referenced in the text of the previous four pages. For example, Plaintiff cites to footnote 29a through 29f in Doc.
200-2. Footnote 29 in Doc. 200-5 references a Kansas case. Yet, none of Plaintiff’s assertions in Doc. 200-2
referencing footnote 29 relate to this Kansas case. It appears that most of Plaintiff’s “response” is contained in Doc.
202 and its accompanying supplements.
6

She is not a party to this lawsuit.

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Thomas Weiford, an expert retained by Defendants regarding Intrust Bank’s handling of
investments, opined that the investment management activities of Defendant Trustees during the
referenced time period were within the norms of industry practice and met the standard of care
for professional trustees in managing and investing the Trust assets. Mr. Weiford also opined
that the investments were made in accordance with the terms of the Trust and in the interests of
the beneficiaries, not favoring one beneficiary over another. Furthermore, Mr. Weiford stated
that Defendant Trustees exercised reasonable care, skill, and caution in administering the Trust.
On or about March 5, 2009, Plaintiff received annual accountings for the Trust from the
year 2000 to 2008. On or about January 12, 2010, Plaintiff received the 2009 annual trust
statement for the Trust.
Procedural History
Plaintiff filed his original Complaint on January 13, 2010 asserting nine causes of action.
The Court dismissed five claims.7 Plaintiff then filed a Motion to Amend Complaint, which the
Court subsequently granted, and Plaintiff filed an Amended Complaint on February 23, 2011.
Plaintiff’s allegations were generally the same in his Amended Complaint, and Defendants again
filed a Motion to Dismiss all claims, with the exception of the breach of trust claim. The Court
granted Defendants’ motion.8 Discovery proceeded on the remaining claim, and discovery
closed on December 4, 2012.
Defendants now move for summary judgment on the remaining breach of trust claim.
There are four additional pending motions. These include: Plaintiff’s Motion for Leave to File
Surreply (Doc. 208), Plaintiff’s Motion for Oral Argument (Doc. 209), and Defendants’ Motion
7

Doc. 53.

8

Doc. 89.

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to Strike Experts (Doc. 184).9 The Court will first address Defendants’ Motion for Summary
Judgment as it is dispositive and renders the remaining motions moot.
II.

Legal Standard

Summary judgment is appropriate if the moving party demonstrates that there is no
genuine issue as to any material fact, and the movant is entitled to judgment as a matter of law.10
A fact is “material” when it is essential to the claim, and issues of fact are “genuine” if the
proffered evidence permits a reasonable jury to decide the issue in either party’s favor.11 The
movant bears the initial burden of proof, and must show the lack of evidence on an essential
element of the claim.12 The nonmovant must then bring forth specific facts showing a genuine
issue for trial.13 These facts must be clearly identified through affidavits, deposition transcripts,
or incorporated exhibits—conclusory allegations alone cannot survive a motion for summary
judgment.14 The Court views all evidence and reasonable inferences in the light most favorable
to the party opposing summary judgment.15
III.

Analysis

Plaintiff appears to allege that Defendants committed a breach of trust because
Defendants (1) invested the Trust assets poorly, (2) did not invest the Trust assets according to
9

Plaintiff recently filed another motion seeking to disqualify Judge Humphries from the case (Doc. 211).

10

Fed. R. Civ. P. 56(c).

11

Haynes v. Level 3 Commc’ns, LLC, 456 F.3d 1215, 1219 (10th Cir. 2006).

12

Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2003) (citing Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986)).
13

Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005).

14

Mitchell v. City of Moore, Okla., 218 F.3d 1190, 1197 (10th Cir. 2000) (citing Adler v. Wal-Mart Stores,
Inc., 144 F.3d 664, 670 (10th Cir. 1998)).
15

LifeWise Master Funding v. Telebank, 374 F.3d 917, 927 (10th Cir. 2004).

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the beneficiaries’ wishes, and (3) failed to provide Plaintiff with information necessary to protect
his interests. Essentially, Plaintiff alleges that Defendants committed a breach of trust because
they failed to seek his investment advice and the Trust has lost value since his grandmother’s
death.
Defendants contend that they are entitled to summary judgment because (1) Plaintiff
cannot establish the appropriate standard of care for a professional trustee and a breach of that
standard because he cannot provide an expert to so testify,16 and (2) even if Plaintiff could
produce expert testimony regarding the standard of care, Defendants did not commit a breach of
trust.

Although Defendants make valid arguments for both contentions, the Court will only

address the second contention.
The Kansas Prudent Investor Act, K.S.A. § 58-24a01 et seq., is applicable when
determining a Trustee’s duties. Specifically, K.S.A. § 58-24a01(a) provides that “a fiduciary
who invests and manages trust assets owes a duty to the beneficiaries of the trust to comply with
the prudent investor rule set forth in this act.” K.S.A. § 58-24a02(a) provides that “a fiduciary
shall invest and manage trust assets as a prudent investor would, by considering the purposes,
terms, distribution requirements and other circumstances of the trust.” Importantly, “compliance
with the prudent investor rule is determined in light of the fact and circumstances existing at the
time of a fiduciary’s decision or action and not by hindsight.”17

16

In Kansas, expert testimony is generally required to establish the standard of care applicable to
professional trustees of a trust and a breach of that duty. See Matter of Estate of Maxedon, 946 P.2d 104, 111, 24
Kan. App. 2d 427, 436-37 (1997). In this case, it does not appear that Plaintiff has appropriately designated
experts. Thus, even if the case would proceed to trial and past summary judgment, Plaintiff would not have
appropriate expert testimony to support his breach of trust claim.
17

K.S.A. § 58-24a08.

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Plaintiff fails to provide the Court with any evidence that controverts Defendants’ facts
that they invested and managed the Trust as a prudent investor would. Instead, Plaintiff simply
claims that the Trust should be worth more based on certain mutual funds that he identified
subsequent to filing this lawsuit. As noted above, the prudent investor rule is not determined by
hindsight. At the summary judgment stage, Plaintiff must come forward with competent and
admissible evidence, and this evidence must demonstrate that there is a genuine issue of material
fact. Plaintiff has done neither as he simply speculates that the Trust should be worth more
money.
Furthermore, the uncontroverted facts demonstrate that although the Trust lost a small
amount of value between 2001 and 2008, the Trust was worth more on December 31, 2011 than
it was worth on January 1, 2001. Thus, the Trust did not lose money as Plaintiff contends. In
addition, the Trust disbursed over $500,000 during this time frame. And finally, the facts
demonstrate that between 2001 and 2011, the Trust outperformed the S&P index. Accordingly,
Plaintiff’s contention that Defendants invested the Trust assets poorly fails.
Second, Plaintiff contends that Defendants did not invest the Trust assets according to his
wishes. He claims that had Defendants listened to his investment advice, the Trust would be
worth in excess of $10 million dollars today. Generally, the duty to administer a trust lies with
the trustee, and the beneficiaries to a trust are not entitled to direct trust investments.18 If a trust
vests the Trustee with the discretion to administer the trust, “beneficiaries have no right to
demand that the trustee’s discretion be delegated to them.”19 Furthermore, “where discretion is

18

Jennings v. Murdock, 553 P.2d 846, 220 Kan. 182 (1976).

19

Id. at 863, 220 Kan. at 201.

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conferred upon the trustee with respect to the exercise of a power, its exercise is not subject to
control by the court, except to prevent an abuse by the trustee in his discretion.”20
In this case, the Trust specifically provides the Trustee with the discretion to invest the
Trust’s assets. Specifically, the Trust states that the Trustee has “the full right, power, and
authority to invest and reinvest any and all funds or other assets coming into Trustee’s hands as
part of the Trust estate . . . .”21 There are no Trust provisions requiring the Trustee to confer with
the beneficiaries when investing the Trust assets. Furthermore, Plaintiff provides this Court with
no evidence that Defendants abused their discretion in administering the Trust. Instead, he
simply speculates that the Trust should be worth more and that Defendants should have
considered his “investment advice.” Plaintiff’s speculation is insufficient to defeat Defendants’
motion for summary judgment. As noted above, Defendants were under no obligation to invest
the Trust assets according to Plaintiff’s “investment advice” because the discretion rested with
the Trustee.
With respect to Plaintiff’s third assertion that Defendants failed to give Plaintiff
information necessary to protect his interests, the uncontroverted facts demonstrate otherwise.
The facts show that Defendants provided Plaintiff with information regarding the Trust. Indeed,
it appears that Plaintiff decided to bring this lawsuit from the information Defendants provided
him.
Plaintiff fails to provide this Court with competent evidence demonstrating that there is a
genuine issue of material fact as to Plaintiff’s breach of trust claim. Thus, Defendants are
entitled to summary judgment on Plaintiff’s remaining claim.
20

Id.

21

Doc. 193-1, the Trust, ¶ 5.4.

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IT IS ACCORDINGLY ORDERED this 25th day of September, 2013, that
Defendants’ Motion for Summary Judgment (Doc. 192) is hereby GRANTED.
IT IS FURTHER ORDERED that Defendants’ Second Motion to Strike Experts Smith,
Whitman, Rosenwald, and Campisi (Doc. 184) is DENIED AS MOOT.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Leave to File a Surreply (Doc.
208) is DENIED AS MOOT.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Oral Argument (Doc. 209) is
DENIED.
IT IS FURTHER ORDERED that Plaintiff’s Motion to Disqualify Judge Humphreys
(Doc. 211) is DENIED AS MOOT.
IT IS SO ORDERED.

ERIC F. MELGREN
UNITED STATES DISTRICT JUDGE

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